IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/44220.html
   My bibliography  Save this paper

Three's company: Wall Street, Capitol Hill, and K Street

Author

Listed:
  • Igan, Deniz
  • Mishra, Prachi

Abstract

This paper explores the link between the political influence of the financial industry and financial regulation in the run-up to the global financial crisis. We construct a detailed database documenting the lobbying activities, campaign contributions, and political connections of the financial industry from 1999 to 2006 in the United States. We find evidence that spending on lobbying by the financial industry and network connections between lobbyists and the legislators were positively linked to the probability of a legislator changing positions in favor of deregulation. The evidence also suggests that hiring connected lobbyists who had worked for legislators in the past enhanced this link.

Suggested Citation

  • Igan, Deniz & Mishra, Prachi, 2011. "Three's company: Wall Street, Capitol Hill, and K Street," MPRA Paper 44220, University Library of Munich, Germany, revised Aug 2012.
    • Handle: RePEc:pra:mprapa:44220
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/44220/1/MPRA_paper_44220.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Efraim Benmelech & Tobias J. Moskowitz, 2010. "The Political Economy of Financial Regulation: Evidence from U.S. State Usury Laws in the 19th Century," Journal of Finance, American Finance Association, vol. 65(3), pages 1029-1073, June.
    2. Braun, Matias & Raddatz, Claudio, 2009. "Banking on politics," Policy Research Working Paper Series 4902, The World Bank.
    3. Jordi Blanes i Vidal & Mirko Draca & Christian Fons-Rosen, 2012. "Revolving Door Lobbyists," American Economic Review, American Economic Association, vol. 102(7), pages 3731-3748, December.
    4. Marianne Bertrand & Matilde Bombardini & Francesco Trebbi, 2014. "Is It Whom You Know or What You Know? An Empirical Assessment of the Lobbying Process," American Economic Review, American Economic Association, vol. 104(12), pages 3885-3920, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Francesco Trebbi & Miao Ben Zhang, 2022. "The Cost of Regulatory Compliance in the United States," NBER Working Papers 30691, National Bureau of Economic Research, Inc.
    2. Laurent Bouton & Paola Conconi & Francisco Pino & Maurizio Zanardi, 2018. "Guns, Environment, and Abortion: How Single-Minded Voters Shape Politicians' Decisions," Working Papers gueconwpa~18-18-15, Georgetown University, Department of Economics.
    3. Kempf, Elisabeth, 2017. "The Job Rating Game: The Effects of Revolving Doors on Analyst Incentives," Working Papers 258, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    4. Heejung Byun & Joseph Raffiee & Martin Ganco, 2019. "Discontinuities in the Value of Relational Capital: The Effects on Employee Entrepreneurship and Mobility," Organization Science, INFORMS, vol. 30(6), pages 1368-1393, November.
    5. Tarek A Hassan & Stephan Hollander & Laurence van Lent & Ahmed Tahoun, 2019. "Firm-Level Political Risk: Measurement and Effects," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(4), pages 2135-2202.
    6. Awad, Emiel & Minaudier, Clement, 2023. "Persuasive Lobbying and the Value of Connections," SocArXiv 8z4ax, Center for Open Science.
    7. Martin Gregor, 2011. "Corporate lobbying: A review of the recent literature," Working Papers IES 2011/32, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Nov 2011.
    8. Asai, Kentaro & Kawai, Kei & Nakabayashi, Jun, 2021. "Regulatory capture in public procurement: Evidence from revolving door bureaucrats in Japan," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 328-343.
    9. Deniz Igan & Prachi Mishra, 2014. "Wall Street, Capitol Hill, and K Street: Political Influence and Financial Regulation," Journal of Law and Economics, University of Chicago Press, vol. 57(4), pages 1063-1084.
    10. John M. de Figueiredo & Brian Kelleher Richter, 2013. "Advancing the Empirical Research on Lobbying," NBER Working Papers 19698, National Bureau of Economic Research, Inc.
    11. Laurent Bouton & Paola Conconi & Francisco Pino & Maurizio Zanardi, 2013. "Guns and Votes," Working Papers ECARES ECARES 2013-39, ULB -- Universite Libre de Bruxelles.
      • Laurent Bouton & Paola Conconi & Francisco Pino & Maurizio Zanardi, 2014. "Guns and Votes," NBER Working Papers 20253, National Bureau of Economic Research, Inc.
      • Laurent Bouton & Paola Conconi & Francisco Pino & Maurizio Zanardi, 2013. "Guns and votes," Working Papers 43819146, Lancaster University Management School, Economics Department.
      • Zanardi, Maurizio & Conconi, Paola & Bouton, Laurent & Pino, Francisco, 2013. "Guns and Votes," CEPR Discussion Papers 9726, C.E.P.R. Discussion Papers.
    12. Cameron K. Murray & Paul Frijters & Markus Schaffner, 2021. "Is transparency an anti-corruption myth?," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 5(1), pages 27-43, Septembre.
    13. Alessandro De Chiara & Marco A. Schwarz, 2020. "A Dynamic Theory of Regulatory Capture," Working Papers 2020-12, Faculty of Economics and Statistics, Universität Innsbruck.
    14. Marianne Bertrand & Matilde Bombardini & Raymond Fisman & Brad Hackinen & Francesco Trebbi, 2021. "Hall of Mirrors: Corporate Philanthropy and Strategic Advocacy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(4), pages 2413-2465.
    15. Adam Fremeth & Brian Kelleher Richter & Brandon Schaufele, 2018. "Spillovers from regulating corporate campaign contributions," Journal of Regulatory Economics, Springer, vol. 54(3), pages 244-265, December.
    16. Luigi Zingales, 2011. "Comment on "A Fistful of Dollars: Lobbying and the Financial Crisis"," NBER Chapters, in: NBER Macroeconomics Annual 2011, Volume 26, pages 236-243, National Bureau of Economic Research, Inc.
    17. Laurent Bouton & Paola Conconi & Francisco Pino & Maurizio Zanardi, 2021. "The Tyranny of the Single-Minded: Guns, Environment, and Abortion," The Review of Economics and Statistics, MIT Press, vol. 103(1), pages 48-59, March.
    18. Alketa Peci & Aline de Menezes Santos & Bruno César Pino Oliveira de Araújo, 2022. "Quo Vadis? Career paths of Brazilian regulators," Regulation & Governance, John Wiley & Sons, vol. 16(2), pages 470-486, April.
    19. Jordi Blanes i Vidal & Mirko Draca & Christian Fons-Rosen, 2012. "Revolving Door Lobbyists," American Economic Review, American Economic Association, vol. 102(7), pages 3731-3748, December.
    20. Groll, Thomas & Ellis, Christopher J., 2014. "A simple model of the commercial lobbying industry," European Economic Review, Elsevier, vol. 70(C), pages 299-316.

    More about this item

    Keywords

    Lobbying; PAC; Financial Regulation;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:44220. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.